Category: landlord

In June we blogged about the idea of rental deposit passporting. The idea is to make it easier for renters to transfer deposits directly between landlords when moving from one property to the next,

Housing Secretary James Brokenshire MP has now announced a Call for Evidence on tenancy deposit protection in England that, among other things, invites views on passporting.

The government hopes to get a better understanding of the problems tenants face in providing a second tenancy deposit when moving from one tenancy to the next. It is also searching for ways to speed up the return of deposits to tenants at the end of their contract. The Call for Evidence will look at whether current thinking on making deposits affordable are meeting tenants’ needs and whether the market can offer improved products.

The results from the Call for Evidence will help the Tenancy Deposit Protection Working Group. This is looking at whether improvements can be made to deposit protection to the benefit of tenants and landlords. ARLA Propertymark is part of the working group – which has been running for the last 12 months. ARLA supports the idea of moving deposits between tenancies. But it says any solutions that the government comes up with must consider the interests of all parties.

“For deposit passporting to work, we need to ensure that both the outgoing landlord’s deposit can be used if needed, while the incoming landlord has certainty they will get the full deposit they have agreed by the tenant,” said ARLA this week.

“Affordability for tenants of any bridging loan or insurance policy will be key if deposit passporting is going to be a workable and affordable solution for the future of deposits.”

So if you are a landlord, a property manager or a tenant with strong views on how this could work in future, you can download the Call for Evidence and have your say by email to DepositReform@communities.gov.uk or online by 5 September.

Good news for tenants today. In future it could be made easier to free-up rental deposits when moving from one property to another via “deposit passporting”. Speaking at a major housing conference in Manchester, Communities Secretary James Brokenshire said this was one of  the ways that the housing market could be made fairer.

“Ministers are inviting proposals to make it easier for renters to transfer deposits directly between landlords when moving from one property to the next,” he said.

This is because some tenants find it a struggle to provide a second deposit to their new landlord. Until their original deposit – on the home they are moving out of – is returned by their current landlord, many renters find themselves in danger of getting into debt or becoming trapped in their current home. With more than 4 million people living in the private rented sector, the government want to understand the scale of this problem.

Shelter welcomed the news. “A deposit passporting scheme would help the country’s hard-pressed renters avoid having to stump up a fresh deposit before they’ve got the old one back, ” said the housing charity in The Times.

But what about landlords? There is a reason why deposits are withheld until the check-out process has been completed – and that’s because not all renters leave properties in good order.  It may not always be possible to inspect a property until after the tenant has left. And any damage may not be immediately obvious. If the deposit has already been “passported” that could leave the previous landlord high and dry.

The suggested solution set out by James Brokenshire today is that the previous landlord should still be able to claim part of the deposit for any damages, and the tenant could top up the deposit if necessary. So could it work? Maybe.

The next step is a Call for Evidence. The industry will be asked to consider whether the scheme should be government-backed, or whether existing deposit schemes could be tweaked to take passporting on board. The Secretary of State told the press today: “We need to do this thoughtfully”. Let’s hope he means it.

Letting agents have been told today, that by not including property management in their services, they could be losing out on “thousands of pounds of potential income”. New research from outsourcing supplier ARPM, reported in Letting Agent Today, shows that many agents typically offer let-only. By offering a full management service too, ARPM calculates they could boost average annual income by up to 80% per tenancy. That’s big money.

The report reveals an untapped market of almost one million landlords in London alone who just use letting agents to find them tenants – or don’t use one at all. With private rentals expanding across the country year-on-year and many landlords living remotely from their investment property, there is huge potential for growth. And a chance to claw back the estimated £400 per letting that agents are expected to lose as a result of the tenant fees ban.

But – and this is a big but – property management is a serious business. The government has property agents in its sights right now and poor service in our sector is soon to be outlawed by the advent of stronger regulation and the need for recognised qualifications. So, like marriage, this isn’t a client relationship to be entered into lightly.

As chartered surveyors and professional managing agents, we have long-standing experience in this market. Our lettings division Life by Ringley, based in Manchester and servicing clients across the region, has a clear understanding of the wide-ranging needs of landlords and tenants. We provide both basic and full management services, with fees clearly stated from the start. Click here to find out more. o.uk/

As well as managing rental property, Ringley specialises in leasehold blocks. Rather than a one-size-fits-all approach, our Blockcare offer has something for everyone, from a basic service to fully managed options. Fees are charged according to the level of management you require. Sign-up is easy and almost everything from site reports, minutes, invoicing and accounts can be done online. We can take us much or as little of the hassle out of your management requirements as you want us to.

We even have a tailor-made package for you to use if you can’t afford a managing agent! So click here to find a package that suits your needs.

With the introduction of more regulation, reductions in tax relief on mortgage interest and 3% Stamp Duty on buy-to-let properties, landlords are really under pressure. Add Section 21 changes into the mix and there is a real risk that, having lit the touch paper, all the government has to do is stand well back and watch the rental market go down in flames.

This may be an exaggeration but according to a recent survey carried out by Landlord Action and reported in yesterday’s Landlord Today, more than a third (38%) of buy-to-let landlords will consider offloading properties if the government axes Section 21 ‘no fault’ evictions. A further 33% said they would only continue being a landlord if “significant changes” are made  to Section 8.

The study also found that 70% of landlords would be less willing to consider a longer-term tenancy if Section 21 was no longer available to them, while 85% said they would be more selective with their choice of tenant. 

This is serious. The government is attempting to reform the private rental sector in order to help tenants but is running the risk of alienating the very landlords that people rely on to provide their homes.

In response, today there has been a new call on the government to rethink its plans to change the Section 21 eviction process. The founder of Landlord Action, Paul Shamplina, has written to housing minister Heather Wheeler, inviting her to gain a greater understanding of the possession process before making drastic reforms, by attending an eviction with him.  In formulating policy and new legislation it is vitally important that any reforms present equal opportunity for everyone operating and living in the private rental sector.

With 85% of landlords telling the National Landlords Association in a recent poll that they would be unlikely to vote for any party proposing to remove Section 21, for the minister’s sake let’s hope she is in listening mode.

On 16 April this blog flagged up government plans to scrap “no-fault” evictions. The change proposed to the Housing Act 1988 means landlords will always need to give tenants a reason for ending a tenancy, such as breach of contract or wanting to sell the property. We also drew attention to the fact that the government needs to show caution if this decision, by putting tenants’ interests first, is not to have unforeseen consequences.

In fact, the results of scrapping Section 21 are not ‘unforeseen’ at all. If the proposed change is not carefully thought through and properly managed, we predict smaller landlords leaving the rental market in favour of less troublesome investments, shrinking the available rental stock as a result.

So why has the government chosen not to introduce three- year tenancies but now seeks to introduce never-ending agreements or contracts that can only end using protracted court eviction processes and proving fault? Many landlords feel more secure in renting their properties knowing that they can get to know their tenants during the first year of their tenancy and have a straightforward way out using Section 21 (a non-adversarial, no-fault process) should any kind of nuisance, behaviour or problem with late payment start to rear its head.  Housing Associations also use a one year contract before they grant long term tenancies for the very same reasons. 

The National Landlord’s Association (NLA) has been quick to slam the proposal, arguing that Section 21 “has become a backstop to overcome the ineffective Section 8 process”. Richard Lambert, CEO of the NLA, talking to Landlord Today earlier this month, said: “Landlords currently have little choice but to use Section 21. They have no confidence in the ability or the capacity of the courts to deal with possession claims quickly and surely, regardless of the strength of the landlord’s case”.

Lambert suggests that before making any major decisions, the government should look to Scotland, which outlawed Section 33 notices (equivalent to Section 21) in December 2017. Scottish landlords were just as resistant to the change as their English counterparts but the predictions of disaster have not materialised, probably due in large part to the fact that the court process was reformed in advance of the Section 33 changes. With Wales also expected to following Scotland’s lead, it is vital that the law makers tread carefully. As Richard Lambert says:  “If the government introduces yet another piece of badly thought-out legislation, we guarantee there will be chaos.” We wholeheartedly agree with that.

Tomorrow’s blog will take a closer look at what could be done to make any new proposals work for tenants AND landlords.

Should landlords be expected to act as border control officials when renting to a new tenant? This is the question that a Judicial Review of the government’s controversial Right to Rent policy, which obliges landlords to undertake immigration checks on prospective tenants, will be asking as it gets underway today.
The Right to Rent scheme was rolled out nationwide in 2016, meaning that landlords must now check the immigration status of would-be tenants. Understandably, this initiative has proved really unpopular. Landlords are already under pressure from the government (see my blog Landlords under fire, posted on 11 December) and certainly don’t want to take on responsibility for ensuring that tenants have a legitimate right to rent a home.
When the scheme came into effect, the Joint Council for the Welfare of Immigrants (JCWI) thought it was so potentially discriminatory that it put forward – and won – a legal challenge, gaining the right to launch a High Court case against the Home Office. As I write this blog, a full hearing is taking place before the High Court today and tomorrow.
The JCWI’s legal challenge is being supported by the Residential Landlords Association (RLA), which has carried out research to find out how landlords feel about the scheme. The RLA found that, as a result of the Right to Rent policy, 44% of landlords are now less likely to rent to someone without a British passport, mainly because they are scared they may be prosecuted if they get something wrong. Landlords also say that, as a result of Brexit and the continuing uncertainty around the future status of EU nationals in Britain, they are now less likely to rent their property to anyone from the EU or the European Economic Area.
According to Landlord Today, the RLA is calling for Right to Rent to be scrapped, arguing that it discriminates against those unable to easily prove their identity and foreign-born nationals who have documents unfamiliar to landlords. It is also calling for urgent guidance for landlords to be issued by the government, explaining clearly the rights of EU citizens to rent property, especially in the case of a no-deal Brexit.
The whole situation is reminiscent of the Windrush scandal that came to light earlier this year. Landlords are not government officials and shouldn’t be expected to act on behalf of the Home Office or to make a judgment call around who is and isn’t legally entitled to rent a property. Landlords are under enough pressure from excessive taxation and a new raft of regulations without being expected to act as immigration officers too.